Disney workers didn't back Eisner

By Associated Press
Published April 20, 2004

LOS ANGELES - An overwhelming number of retirement fund shares held by current and former employees of the Walt Disney Co. were cast against chief executive Michael Eisner at the company's annual meeting - further evidence that Eisner should go, two Disney dissidents said Monday.

Records released by the company show that 72.5 percent of the votes cast by the trustee of Disney's 401(k) program, withheld support for the re-election of Eisner.

Of the votes cast, 63.7 percent withheld support for board chairman George Mitchell, the figures show.

The votes were cast at the company's annual shareholders meeting March 3 in Philadelphia.

The vote is far higher than the 45.3 percent of all votes cast that withheld support from Eisner and the 25.6 percent withheld from Mitchell.

After the meeting, Disney's board split the roles of chairman and CEO, naming Mitchell chairman and leaving Eisner as CEO.

"The simple fact is that the vast majority of people who participate in the company's 401(k) plans and voted their shares at the annual meeting have no confidence in either their CEO or their newly elected chairman," former Disney directors Stanley Gold and Roy E. Disney said in a statement.

"It is hard to see how Mr. Eisner can do what needs to be done at this company without the support of the company's employees," they said.

Disney representatives were quick to point out Monday that the 28.6-million shares in the 401(k) plan are less than 1.5 percent of outstanding shares.

Disney also said that fewer than 9,400 of the approximately 36,000 participants in the retirement plan actually cast a ballot - a turnout of about 25 percent.

"This is another blatant distortion and manipulation of data in an attempt to continue to mislead Disney shareholders," company spokesman John Spelich said.

It is not known how many shares were owned by the 9,400 plan participants - some of whom are retired or have left the company.

Disney noted that Fidelity Management, which serves as trustee for the retirement plan, voted the entire 28.6-million shares in direct prorata proportion to the shares actually voted by employees.

Gold and Roy Disney called the employee vote a "meaningful barometer of employee dissatisfaction" and an indication that Eisner was a "lame duck" who does not have the support needed to lead.

The two resigned from the board last fall, saying they were dissatisfied with the company's leadership and tepid stock performance since 1997.

Since then, Disney has said it expects earnings growth of 40 percent this year and double digit growth through 2007.

Disney shares gained 6 cents to close at $24.96 Monday on the New York Stock Exchange.